Farmers can apply for interest-free loans aimed at slashing farm energy bills by making equipment more efficient.

As much as £4m could be saved by the government-backed initiative aimed at encouraging farmers to upgrade their equipment.

Unsecured loans from the Carbon Trust became available on Monday (1 February).

Junior DEFRA minister Jim Fitzpatrick said any farmer who wanted to reduce their energy costs should apply.

“It makes sense for farmers to reduce the energy they use – it saves them money, it reduces the cost of producing food, and it cuts the environment impact too.”

The loans – from £3,000 to £20,000 – are designed to pay for themselves through direct energy savings over one to four years.

After the loan is repaid, farmers will make direct savings on their energy costs, as well as cutting the carbon footprint of the food they produce.

The loans scheme is part of the Carbon Trust’s Big Business Refit – a nationwide campaign encouraging businesses to replace old, energy intensive equipment.

Money has been made available from a £100 million Carbon Trust fund ring-fenced by the Treasury from the 1 April 2009 until the end of March 2011.

The loans will be available on a first-come-first-served basis.

NFU president Peter Kendall said: “Improving energy efficiency is a win-win situation because it helps cut agriculture’s greenhouse gas emissions as well as saving money for farmers and growers.

“There are already examples of businesses that have taken simple but effective steps to reduce their environmental impact in this way and I hope these loans will enable others to follow suit.”

Investing in a new milk cooling system would typically cost £3,000 but could save the average dairy farm up to £1,000 and 6t of CO2 a year.

Installing grain drying humidity controls would cost a similar amount but save £1,500 or 10t of CO2 a year.

Farmers cannot apply in advance for the loans, but can register to be contacted once the loans become available by calling 01865 885846.

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